OCIP / WRAP Certificates

[KPTEE]

I recently attended an OCIP seminar put on by Gallagher. One thing the speaker mentioned was that there is increasing case law stating that certificates hold more weight then just being an evidence of coverage. As a result, when issuing a cert on a wrap project, they are very careful to state on the certificate that coverage is for off-site work only. Two questions, 1) Does anyone know anything about this supposed case law?
2) If it exists, do you think attaching a copy of the Wrap/OCIP exclusion is sufficient?

[TheInsKid]

Gallagher got nailed in a recent lawsuit about creating certs for a program when the carrier said they did not have the authority. I bleieve they are on appeal.

Check out the article on the Big I website about certs or go to the RIMS site and buy their cert book (I think it is 20 bucks) it will open your eyes.

Most of the quoted law that is out there has stated that a cert is just that a matter of information and does not alter the policy unless an agency has gone way overboard and gave coverage where no coverage was in the first place.

I attended RIMS last week and they had a 90 min session about certs, very interesting. Also have attended several sessions with the BIG I. In many cases and opinions, too many people try to make certs out to be more than there are. Again, they do not replace a policy and the policy speaks for itself in most cases unless there is faurd or mis representation by the agency producing the cert.

It would be interesting to see where the person from Gallagher is getting their data and information from.

[LadyBroker]

You know, this off-site issue is a big big deal....and unless your carrier specifically allows the off-site work on the practice policy, it is excluded. Read your wrap exclusions, talk to your carriers and know this -- if you, the retailer, issue a cert that says Off Site work is covered, and it's really not, guess who pays the claim? Your E & O Carrier. And the deductible your employer will have to absorb will not be pretty.

And yes, Gallagher was tagged for issuing CG2010 11/85 endorsements when the carrier did NOT use that form. The case was settled, I believe, late 2005 or early 2006. I hadn't heard that they were appealing, don't see how they can, as they were clearly in the wrong. Plus the damages against them were only $35,000 or so....they have to be spending way more than that for the litigation portion to actually appeal.

[KJOBF]

As an insurance agent, I have been dealing with the OCIP cert requests for my subcontractors for several years. I find it amazing that some of the large alphabet houses administering the OCIP Program insist on the subs naming the Owner/GC as Addl Insd/Primary/Waiver for "off site" coverage when they know that in most cases the policies do not differentiate between on site & off site and any work done for the OCIP is excluded by endorsement. I do issue the Certificate (no Addl Insd/Prim/Waiver) and attach the OCIP exclusion. I have had several confrontations with the program administrators, because I refuse to name the Owner/Builder as addl insd. One of my subcontractors was removed from the OCIP Program, because I would not provide a "falsified" cert. I always hear "other agents do it without a problem." I believe the Owner/GC will go after the subcontractors insurance coverage in the future (for projects that go awry) and the retail agents who have followed the certificate guidelines ordered by the OCIP will find themselves in E&O trouble.

[rcenters]

Do OCIPs usually provide off-site at all?

[LadyBroker]

An OCIP typically does not provide coverage for work done off-site. You should read each OCIP individually, though, to determine if, in fact, they include or exclude Off Site work. OCIP's are not always standard forms, and as such, you have to be very careful in your discussions with your clients.

[rcenters]

So, if the sub's policy has a wrap-up exclusion that doesn't differentiate between on and off site, and the wrap up might not cover it either, then that's a huge gap isn't it?

How would you resolve that gap? I would think you pretty much either have to ask the carrier to manuscript off site coverage, remarket to one that will or buy project specific GL coverage....

[KJOBF]

There are a couple of carriers who offer a policy for subs to cover "off site" and warranty work. The problem I have is it is designed for residential work and not commercial projects.

I have run into a problem in which the owner wants to close out the OCIP policy and my subcontractor is not completed with their work. I receive a notice to start covering the work under my sub's policy and the carrier will refuse. I had to convince the owner/contractor to issue a new contract to the sub for the remainder of the work, before the carrier would touch it.

[LadyBroker]

A wrap exclusion doesn't differentiate between on site and off site work. It simply EXCLUDES all work associated with the wrap, it doesn't matter where the work is actually done.

[rcb]

Not all OCIP exclusions are created equal.

If you can get the CG 21 54 A 01 96, there is no exclusion of off-site work.

I have seen others that exclude work "covered by" an OCIP. My opinion is that this would also provide off site coverage to the insured if it is not provided by the OCIP policy. Don't want to test it though.

[pita3333]

This thread proves the statement "read every form every time!"

It is our responsibility to know what we are sending our clients...

[LadyBroker]

RCB, I would be really careful with that interpretation. The best example I get from my underwriters is the cabinet maker. He builds the cabinets in his shop, and then installs them at the premises of the OCIP or wrap. If there is a loss....is he covered?
My underwriters all say No, because it's work for a wrap. They don't so much care where the cabinets were built, as much as they care that the end result is they went into a wrap.

Plus, here's my question to the group -- what kind of a loss would you be contemplating off-site of a wrap? I don't have a good answer, and am hoping someone else has a good real life example.

Thanks!

[rcenters]

Auto policies don't have wrap exclusions but if your auto was involved in an accident off-site and the injured party's attorney learned of the job it was coming from, that's one way.

For a GL loss though....it's not that easy to come up with an example... but I imagine one possibility is that if a contractor's employees got into a fight in a bar across the street from the job, that would be an off-site exposure.

[LadyBroker]

But how is the GL policy dragged into to a barfight? I always ask my underwriters for an example of what could happen off site that we would have to cover, and the only example I have so far is the afore-mentioned Cabinet maker.

Someone said in an earlier post that one of the CG forms didn't exlude Off site work, maybe he has some good examples of claims that would then be covered?

[rcb]

Some more thoughts on OCIPs

It would not be unusual for supervisory or QC people for the General on the OCIP to visit the off site shop of a sub to make sure that the work is on time and to spec. Some subs that come to mind are HVAC making duct work off site, cabinet shops, custom countertops etc. If those people are hurt at the subs shop, their lawsuit would not be coverd by the OCIP or the sub's CGL (if he has an off site exclusion)

Another problem for subs working on an OCIP, and I don't know if I have read enough OCIP insurance contracts to generalize, is that many exclude products liability for products manufactured off site, even if the occurrence is on the OCIP site. Cabinetmakers, HVAC building ductwork in a shop, custom counter creator/installers beware. Your CGL will not pick up the claim because it excludes BI or PD at the location.